Astronics Corporation Reports 14% Growth in Sales in 2024 Second Quarter

Rhea-AI Summary

Astronics (ATRO) reported 14% sales growth to $198.1 million in Q2 2024. Key highlights include:

- Operating income increased to $7.6 million (3.8% of sales)
- Net income of $1.5 million ($0.04 per diluted share)
- Adjusted EBITDA grew 28% to $20.2 million (10.2% of sales)
- Record backlog of $633.4 million with 1.11x book-to-bill ratio
- Aerospace segment achieved 10th consecutive record backlog of $554.6 million

The company raised its 2024 revenue guidance to $780-$800 million. Q2 results were driven by increased demand, new program wins, and improved operational efficiency. Aerospace segment sales grew 11.7% to $176.9 million, while Test Systems sales increased to $21.2 million.

Positive

• 14% year-over-year sales growth to $198.1 million in Q2 2024
• Operating income increased to $7.6 million (3.8% of sales) from $2.4 million in Q2 2023
• Adjusted EBITDA grew 28% to $20.2 million (10.2% of sales)
• Record backlog of $633.4 million with 1.11x book-to-bill ratio
• Aerospace segment achieved 10th consecutive record backlog of $554.6 million
• Raised 2024 revenue guidance to $780-$800 million
• Aerospace segment sales increased 11.7% to $176.9 million
• Commercial Transport sales increased 14.6% to $128.4 million
• Military Aircraft sales increased 82.4% to $24.8 million
• Refinanced debt structure, providing improved liquidity and lower cash costs

Negative

• Test Systems segment reported an operating loss of $5.3 million
• $3.5 million negative impact on Test Systems sales due to revision of estimated costs for long-term mass transit contracts
• General Aviation sales decreased 24% to $19.0 million
• Net debt increased to $174.0 million from $161.2 million at end of 2023
• Q3 2024 expenses to include approximately $7.5 million in refinancing-related fees and costs

Insights

Financial Analyst

Astronics 's Q2 2024 results demonstrate significant improvement across key financial metrics, signaling a robust recovery in the aerospace sector. The 14% year-over-year sales growth to $198.1 million is particularly impressive, driven by strong performance in both the Aerospace and Test Systems segments.

The company's profitability has seen a marked improvement, with operating income increasing to $7.6 million, or 3.8% of sales. This is a substantial jump from the $2.4 million reported in the same period last year. The adjusted EBITDA growth of 28% to $20.2 million further underscores the company's operational efficiency gains.

Notably, Astronics achieved a net income of $1.5 million, or $0.04 per diluted share, a significant turnaround from the net loss of $12.0 million in Q2 2023. This positive shift in profitability, coupled with strong bookings of $219.0 million and a record backlog of $633.4 million, suggests a promising trajectory for the company.

The company's decision to raise its 2024 revenue guidance to $780 million to $800 million reflects management's confidence in sustained growth. However, investors should remain cautious of potential risks associated with OEM production rates and the ongoing challenges in the Test Systems segment, particularly the $3.5 million negative impact from revised cost estimates on certain long-term contracts.

Overall, Astronics' Q2 results and raised guidance paint a picture of a company successfully navigating the aerospace industry's recovery, with strong potential for continued growth and improved profitability in the coming quarters.

Aerospace Industry Expert

Astronics' Q2 2024 results reflect the broader recovery trend in the aerospace industry, with particularly strong performance in the Commercial Transport sector. The 14.6% increase in Commercial Transport sales to $128.4 million indicates robust demand from airlines, likely driven by increased air travel and fleet modernization efforts.

The 82.4% surge in Military Aircraft sales to $24.8 million is noteworthy, highlighting Astronics' success in diversifying its revenue streams. The progress on the FLRAA program and increased sales of lighting, safety and avionics products for military aircraft demonstrate the company's ability to capitalize on defense spending trends.

However, the 24% decrease in General Aviation sales to $19.0 million warrants attention. This decline, attributed to lower antenna and VVIP sales, may indicate some softness in the business jet market or potential shifts in customer preferences.

The record Aerospace segment backlog of $554.6 million is a strong indicator of future revenue potential. This, combined with the company's focus on operational efficiency and innovation across product lines, positions Astronics well to benefit from the ongoing aerospace industry recovery.

Looking ahead, investors should monitor how Astronics navigates potential challenges such as supply chain constraints and labor shortages that continue to affect the broader aerospace industry. The company's ability to maintain its operational improvements and capitalize on its strong backlog will be important for sustaining its growth trajectory in the competitive aerospace market.

• Sales grew 14% to $198.1 million in the quarter
• Operating income increased to $7.6 million in the quarter, or 3.8% of sales
• Achieved net income for the quarter of $1.5 million, or $0.04 per diluted share
• Adjusted EBITDA¹ grew 28% to $20.2 million, or 10.2% of sales, an increase of $4.4 million over the second quarter of the prior year
• Bookings in the quarter were $219.0 million, driving a record backlog of $633.4 million with book to bill ratio of 1.11x
• Aerospace achieved its tenth consecutive record backlog of $554.6 million
• Raising 2024 revenue guidance to $780 million to $800 million

EAST AURORA, N.Y.--(BUSINESS WIRE)-- Astronics Corporation (Nasdaq: ATRO) (“Astronics” or the “Company”), a leading supplier of advanced technologies and products to the global aerospace, defense, and other mission-critical industries, today reported financial results for the three and six months ended June 29, 2024.

Astronics Segment Sales and Bookings (Graphic: Business Wire)

Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “Our second quarter confirmed success with increased demand, new program wins, and our ability to deliver product to our customers more efficiently and predictably. We exceeded our guidance with 14% growth in sales and improved profitability. Bookings were at a post-pandemic high, resulting in yet another record backlog. Our strong performance supports raising our expectations for the year. Looking beyond 2024, our market leadership positions, the significant programs that we have won recently, and our high level of innovation point to a long runway for delivering value and improved earnings power.”

____________________________

1 Adjusted EBITDA is a Non-GAAP Performance Measure. Please see the attached table for a reconciliation of adjusted EBITDA to GAAP net income (loss).

Second Quarter Results

		Three Months Ended											Six Months Ended
($ in thousands)		June 29, 2024				July 1, 2023				% Change			June 29, 2024				July 1, 2023				% Change
Sales		$	198,114			$	174,454			13.6	%		$	383,188			$	330,992			15.8	%
Income from Operations		$	7,550			$	2,396			215.1	%		$	9,216			$	26			35,346.2	%
Operating Margin %			3.8	%			1.4	%						2.4	%			—	%
Net Gain on Sale of Business		$	—			$	—						$	—			$	(3,427	)
Net Income (Loss)		$	1,533			$	(11,999	)		112.8	%		$	(1,645	)		$	(16,414	)		90.0	%
Net Income (Loss) %			0.8	%			(6.9	)%						(0.4	)%			(5.0	)%
*Adjusted EBITDA		$	20,243			$	15,844			27.8	%		$	39,316			$	21,922			79.3	%
*Adjusted EBITDA Margin %			10.2	%			9.1	%						10.3	%			6.6	%
*Adjusted EBITDA is a Non-GAAP Performance Measure. Please see the attached table for a reconciliation of adjusted EBITDA to GAAP net income (loss).

Second Quarter 2024 Results (compared with the prior-year period, unless noted otherwise)

Consolidated sales were up $23.7 million, or 13.6%. Aerospace sales increased $18.6 million and Test Systems sales increased $5.1 million.

Consolidated operating income increased to $7.6 million, compared with operating income of $2.4 million in the prior-year period. Improved operating income reflects the operating leverage gained on higher sales volume, partially offset by $4.0 million in bonus expense as the Company’s incentive programs resumed in 2024.

Consolidated sales and operating profit were negatively impacted by $3.5 million due to a revision of estimated costs to complete certain long-term mass transit contracts in the Test Systems segment.

Consolidated net income was $1.5 million, or $0.04 per diluted share, measurably improved compared with the net loss of $12.0 million, or $0.37 per diluted share, in the prior year. Tax benefit in the quarter was $0.3 million, compared with tax expense of $8.1 million in the prior year.

Consolidated adjusted EBITDA increased to $20.2 million, or 10.2% of consolidated sales, compared with adjusted EBITDA of $15.8 million, or 9.1% of consolidated sales, in the prior-year period primarily as a result of higher sales.

Bookings were $219.0 million in the quarter resulting in a book-to-bill ratio of 1.11:1. For the trailing twelve months, bookings totaled $783.6 million and the book-to-bill ratio was 1.06:1.

Aerospace Segment Review (refer to sales by market and segment data in accompanying tables)

Aerospace Second Quarter 2024 Results (compared with the prior-year period, unless noted otherwise)

Aerospace segment sales increased $18.6 million, or 11.7%, to $176.9 million. The improvement was driven by a 14.6% increase, or $16.3 million, in Commercial Transport sales. Sales to this market were $128.4 million, or 64.8% of consolidated sales in the quarter, compared with $112.1 million, or 64.3% of consolidated sales in the second quarter of 2023. Higher airline spending drove increased demand.

Military Aircraft sales increased $11.2 million, or 82.4%, to $24.8 million, driven by progress on the FLRAA program as well as higher sales of lighting, safety and avionics products for military aircraft. General Aviation sales decreased $6.0 million, or 24.0%, to $19.0 million due to lower antenna and VVIP sales.

Aerospace segment operating profit of $19.3 million grew 41% compared with operating profit of $13.7 million in the same period last year. As a percent of sales, operating margin expanded to 10.9%, or 220 basis points over the prior-year period. Operating margin expansion reflects the leverage gained on higher volume and improving production efficiencies. Operating profit in the second quarter of 2024 was impacted by a $3.0 million increase in litigation-related legal expenses and reserve adjustments related to an ongoing patent dispute and $2.9 million related to the resumption of the Company’s incentive programs.

Aerospace bookings were $192.7 million for a book-to-bill ratio of 1.09:1. Backlog for the Aerospace segment was a record $554.6 million at quarter end.

Mr. Gundermann commented, “The strong demand for our Aerospace products and technologies continues to gain momentum as the aerospace industry recovers. Encouragingly, we are seeing strength across all of our Aerospace product lines. While our significant position in inflight entertainment and connectivity continues to grow, we are also seeing strong growth in our flight critical power and aircraft lighting thrusts. At the same time, we are continuing to become more efficient at delivering product reliably and predictably and the higher throughput is beginning to show the operating leverage that is inherent in our business.”

Test Systems Segment Review (refer to sales by market and segment data in accompanying tables)

Test Systems Second Quarter 2024 Results (compared with the prior-year period, unless noted otherwise)

Test Systems segment sales were $21.2 million, up $5.1 million. The improvement was driven by radio test sales following the award of the U.S. Army TS-4549/T contract, which contributed $7.2 million in sales during the quarter. However, segment sales were negatively impacted by $3.5 million due to a revision of estimated costs to complete certain long-term mass transit Test contracts. The revision resulted in reduced revenue recognized in the period due to lower estimates of the percentage of work completed on the programs.

Test Systems segment operating loss was $5.3 million, compared with operating loss of $6.1 million in the second quarter of 2023. The positive margin realized on the Army contract was offset by $3.5 million related to the revision of estimated costs noted above. Additionally, Test Systems continues to be negatively affected by mix and under absorption of fixed costs due to current volume.

In April 2024, the Test Systems segment implemented restructuring initiatives to align the workforce and management structure with near-term revenue expectations and operational needs resulting in $0.7 million in severance expense recognized during the second quarter. As part of the restructuring the Test business closed an operation in Kilgore, TX, simplifying its operations. We expect to realize annual savings of approximately $4 million from these activities, beginning in the third quarter.

Bookings for the Test Systems segment in the quarter were $26.4 million, including a $15.5 million initial booking for the U.S. Army TS-4549/T radio test set program. The book-to-bill ratio was 1.25:1 for the quarter. Backlog was $78.8 million at the end of the second quarter of 2024 compared with a backlog of $73.6 million at the end of the previous quarter.

Mr. Gundermann commented, “The second quarter was an important reset for our Test business. We finally were awarded the U.S. Army’s radio test program known as 4549/T, which we expect will bring revenue of $215 million or so over the next few years. We also completed a major restructuring of the business including the elimination of a peripheral manufacturing facility, our second of three such consolidations planned for the business. Finally, we performed our quarterly review of certain long-term mass transit contracts which resulted in an increase in the estimated costs to complete as the programs are not progressing as efficiently as expected. This was certainly a painful adjustment but, combined with the restructuring and the 4549/T award, we believe the business is set for a considerably brighter future.”

Liquidity and Financing

Capital expenditures in the quarter were $1.8 million and $3.4 million year-to-date. Net debt was $174.0 million, up from $161.2 million at December 31, 2023.

Cash used for operations in the second quarter of 2024 was primarily the result of a $16.7 million increase in accounts receivable which was related to increased sales and the timing of shipments.

On July 11, 2024, the Company announced it had amended and expanded its revolving line of credit and refinanced its term loan. The refinancing provides improved liquidity, lower cash costs, and greater financial flexibility for the Company. The refinancing is comprised of an expanded asset-based line of credit and a reduced, lower-cost term loan.

The revolving line of credit was expanded from $115 million to a $200 million maximum subject to the borrowing base, with an interest rate of SOFR plus 2.5% to 3.0% varying based on the Company’s consolidated leverage ratio. At closing, Astronics had $128 million drawn on the facility.

The new $55 million term loan has an interest rate of SOFR plus 5.5% to 6.75% varying based on the Company’s consolidated leverage ratio. Cash amortization of the new term loan will be approximately $550,000 annually, down from the previous rate of approximately $9.0 million.

The lower combined interest rate is expected to reduce interest expense by $2.0 million annually. The new debt structure afforded the Company approximately $50 million of available liquidity at closing, which was up from approximately $15 million prior.

Third quarter 2024 expenses will include refinancing-related fees, the call premium on the previous term loan and the write-off of deferred financing costs related to the previous financing. These expenses in total are estimated to be $7.5 million.

2024 Outlook

The Company is increasing its 2024 revenue guidance to $780 million to $800 million. The midpoint of this range would be a 15% increase over 2023 sales. Astronics considered the broad range of tailwinds affecting the business balanced against certain risks, including those associated with OEM production rates, in issuing its guidance.

The Company expects third quarter revenue to be in the range of $195 million to $205 million.

Backlog at the end of the second quarter was a record $633.4 million, of which approximately $402.3 million is expected to ship in 2024. Planned capital expenditures in 2024 are expected to be in the range of $17 million to $22 million.

Peter Gundermann commented, “We are making excellent progress as an organization, with first half 2024 sales up 15.8% and strong margin improvement. We believe the table is set for current trends to continue, and that 2024 will finish as a very strong year. Our innovative products are valued by our customers, we are executing on key wins after significant investments of time and money over the last few years, and we are regaining our operational stride which allows continued expansion of our margin profile and earnings.”

Second Quarter 2024 Webcast and Conference Call

The Company will host a teleconference today at 4:45 p.m. ET. During the teleconference, management will review the financial and operating results for the period and discuss Astronics’ corporate strategy and outlook. A question-and-answer session will follow.

The Astronics conference call can be accessed by calling (412) 317-0518. The listen-only audio webcast can be monitored at investors.astronics.com. To listen to the archived call, dial (412) 317-6671 and enter replay pin number 10189526. The telephonic replay will be available from 8:00 p.m. on the day of the call through Thursday, August 15, 2024. The webcast replay can be accessed via the investor relations section of the Company’s website where a transcript will also be posted once available.

About Astronics Corporation

Astronics Corporation (Nasdaq: ATRO) serves the world’s aerospace, defense, and other mission-critical industries with proven innovative technology solutions. Astronics works side-by-side with customers, integrating its array of power, connectivity, lighting, structures, interiors, and test technologies to solve complex challenges. For over 50 years, Astronics has delivered creative, customer-focused solutions with exceptional responsiveness. Today, global airframe manufacturers, airlines, military branches, completion centers, and Fortune 500 companies rely on the collaborative spirit and innovation of Astronics. The Company’s strategy is to increase its value by developing technologies and capabilities that provide innovative solutions to its targeted markets.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Securities Exchange Act of 1934. One can identify these forward-looking statements by the use of the words “expect,” “anticipate,” “plan,” “may,” “will,” “estimate,” “feeling” or other similar expressions and include all statements with regard to achieving any revenue or profitability expectations, aircraft production rates, the predictability of the supply chain and productivity of manufacturing personnel and efficiency of staff, the effectiveness on profitability of cost reduction efforts, the effect of pricing on margins, the execution of program wins, the benefit of market position, success with program awards and contributions of innovation, the length of the runway for improved earnings, the level of liquidity and its sufficiency to meet current needs, the rate of acceleration of the business, the level of cash generation, the level of demand by customers and markets. Because such statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Important factors that could cause actual results to differ materially from what may be stated here include the impact of global pandemics and related governmental and other actions taken in response, the trend in growth with passenger power and connectivity on airplanes, the state of the aerospace and defense industries, the market acceptance of newly developed products, internal production capabilities, the timing of orders received, the status of customer certification processes and delivery schedules, the demand for and market acceptance of new or existing aircraft which contain the Company’s products, the impact of regulatory activity and public scrutiny on production rates of a major U.S. aircraft manufacturer, the need for new and advanced test and simulation equipment, customer preferences and relationships, the effectiveness of the Company’s supply chain, and other factors which are described in filings by Astronics with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this news release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.

FINANCIAL TABLES FOLLOW

ASTRONICS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(Unaudited, $ in thousands except per share data)
		Three Months Ended								Six Months Ended
		6/29/2024				7/1/2023				6/29/2024				7/1/2023
Sales1		$	198,114			$	174,454			$	383,188			$	330,992
Cost of products sold			156,760				141,759				307,643				270,787
Gross profit			41,354				32,695				75,545				60,205
Gross margin			20.9	%			18.7	%			19.7	%			18.2	%
Selling, general and administrative			33,804				30,299				66,329				60,179
SG&A % of sales			17.1	%			17.4	%			17.3	%			18.2	%
Income from operations			7,550				2,396				9,216				26
Operating margin			3.8	%			1.4	%			2.4	%			—	%
Net gain on sale of business2			—				—				—				(3,427	)
Other expense (income)3			435				378				871				(910	)
Interest expense, net			5,856				5,920				11,615				11,390
Income (loss) before tax			1,259				(3,902	)			(3,270	)			(7,027	)
Income tax (benefit) expense			(274	)			8,097				(1,625	)			9,387
Net income (loss)		$	1,533			$	(11,999	)		$	(1,645	)		$	(16,414	)
Net income (loss) % of sales			0.8	%			(6.9	)%			(0.4	)%			(5.0	)%
Basic earnings (loss) per share:		$	0.04			$	(0.37	)		$	(0.05	)		$	(0.50	)
Diluted earnings (loss) per share:		$	0.04			$	(0.37	)		$	(0.05	)		$	(0.50	)
Weighted average diluted shares outstanding (in thousands)			35,547				32,614				34,936				32,560
Capital expenditures		$	1,796			$	2,233			$	3,394			$	3,806
Depreciation and amortization		$	6,203			$	6,711			$	12,531			$	13,373

____________________________

1 In the six months ended July 1, 2023, $5.8 million was recognized in sales related to the reversal of a deferred revenue liability recorded with a previous acquisition within our Test Systems Segment.

2 Net gain on sale of business for the six months ended July 1, 2023 is comprised of the additional gain on the sale of the Company’s former semiconductor test business resulting from the contingent earnout for the 2022 calendar year.

3 Other expense (income) for the six months ended July 1, 2023 includes income of $1.8 million associated with the reversal of a liability related to an equity investment, as we will no longer be required to make the associated payment.

Reconciliation to Non-GAAP Performance Measures

In addition to reporting net income, a U.S. generally accepted accounting principle (“GAAP”) measure, we present Adjusted EBITDA (earnings before interest, income taxes, depreciation and amortization, non-cash equity-based compensation expense, goodwill, intangible and long-lived asset impairment charges, equity investment income or loss, legal reserves, settlements and recoveries, restructuring charges, gains or losses associated with the sale of businesses and grant benefits recorded related to the AMJP program), which is a non-GAAP measure. The Company’s management believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the performance of its core operations from period to period by removing the impact of the capital structure (interest), tangible and intangible asset base (depreciation and amortization), taxes, equity-based compensation expense, goodwill, intangible and long-lived asset impairment charges, equity investment income or loss, non-cash reserves related to customer bankruptcy filings, legal reserves, settlements and recoveries, litigation-related expenses, restructuring charges, gains or losses associated with the sale of businesses and grant benefits recorded related to the AMJP program, which is not commensurate with the core activities of the reporting period in which it is included. As such, the Company uses Adjusted EBITDA as a measure of performance when evaluating its business and as a basis for planning and forecasting. Adjusted EBITDA is not a measure of financial performance under GAAP and is not calculated through the application of GAAP. As such, it should not be considered as a substitute for the GAAP measure of net income and, therefore, should not be used in isolation of, but in conjunction with, the GAAP measure. Adjusted EBITDA, as presented, may produce results that vary from the GAAP measure and may not be comparable to a similarly defined non-GAAP measure used by other companies.

ASTRONICS CORPORATION
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(Unaudited, $ in thousands)
		Consolidated
		Three Months Ended								Six Months Ended
		6/29/2024				7/1/2023				6/29/2024				7/1/2023
Net income (loss)		$	1,533			$	(11,999	)		$	(1,645	)		$	(16,414	)
Add back (deduct):
Interest expense			5,856				5,920				11,615				11,390
Income tax (benefit) expense			(274	)			8,097				(1,625	)			9,387
Depreciation and amortization expense			6,203				6,711				12,531				13,373
Equity-based compensation expense			1,840				1,593				4,642				3,992
Non-cash annual stock bonus accrual			—				—				1,448				—
Non-cash 401K contribution and quarterly bonus accrual			—				1,328				3,454				2,536
Restructuring-related charges including severance			657				564				774				564
Legal reserve, settlements and recoveries			—				(1,305	)			—				(1,305	)
Litigation-related legal expenses			4,428				4,935				8,122				9,450
Equity investment accrued payable write-off			—				—				—				(1,800	)
Net gain on sale of business			—				—				—				(3,427	)
Deferred liability recovery			—				—				—				(5,824	)
Adjusted EBITDA		$	20,243			$	15,844			$	39,316			$	21,922
Sales		$	198,114			$	174,454			$	383,188			$	330,992
Adjusted EBITDA margin on sales			10.2	%			9.1	%			10.3	%			6.6	%

ASTRONICS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
($ in thousands)
		(unaudited)
		6/29/2024			12/31/2023
ASSETS
Cash and cash equivalents		$	2,857		$	4,756
Restricted cash			1,535			6,557
Accounts receivable and uncompleted contracts			186,295			172,108
Inventories			200,679			191,801
Other current assets			21,039			14,560
Property, plant and equipment, net			82,511			85,436
Other long-term assets			32,957			34,944
Intangible assets, net			58,843			65,420
Goodwill			58,143			58,210
Total assets		$	644,859		$	633,792
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt		$	1,300		$	8,996
Accounts payable and accrued expenses			122,207			112,309
Customer advances and deferred revenue			17,635			22,029
Long-term debt			172,635			159,237
Other liabilities			73,202			81,703
Shareholders' equity			257,880			249,518
Total liabilities and shareholders' equity		$	644,859		$	633,792

ASTRONICS CORPORATION
CONSOLIDATED CASH FLOWS DATA
		Six Months Ended
(Unaudited, $ in thousands)		6/29/2024				7/1/2023
Cash flows from operating activities:
Net loss		$	(1,645	)		$	(16,414	)
Adjustments to reconcile net loss to cash from operating activities:
Non-cash items:
Depreciation and amortization			12,531				13,373
Amortization of deferred financing fees			1,695				1,363
Provisions for non-cash losses on inventory and receivables			2,415				1,705
Equity-based compensation expense			4,642				3,992
Net gain on sale of business			—				(3,427	)
Operating lease non-cash expense			2,562				2,563
Non-cash 401K contribution and quarterly bonus accrual			3,454				2,536
Non-cash annual stock bonus accrual			1,448				—
Non-cash deferred liability reversal			—				(5,824	)
Other			1,827				(1,275	)
Cash flows from changes in operating assets and liabilities:
Accounts receivable			(15,281	)			(22,619	)
Inventories			(11,398	)			(22,638	)
Accounts payable			(4,661	)			14,081
Accrued expenses			9,255				5,611
Income taxes			(4,487	)			7,422
Operating lease liabilities			(2,447	)			(2,674	)
Customer advance payments and deferred revenue			(4,280	)			959
Supplemental retirement plan liabilities			(209	)			(206	)
Other assets and liabilities			356				321
Net cash used by operating activities			(4,223	)			(21,151	)
Cash flows from investing activities:
Proceeds on sale of business and assets			—				3,427
Capital expenditures			(3,394	)			(3,806	)
Net cash used by investing activities			(3,394	)			(379	)
Cash flows from financing activities:
Proceeds from long-term debt			15,392				131,732
Principal payments on long-term debt			(9,498	)			(112,774	)
Stock award and employee stock purchase plan activity			(3,172	)			(601	)
Financing-related costs			(1,837	)			(6,388	)
Finance lease principal payments			(70	)			(24	)
Other			(10	)			—
Net cash provided by financing activities			805				11,945
Effect of exchange rates on cash			(109	)			101
Decrease in cash and cash equivalents and restricted cash			(6,921	)			(9,484	)
Cash and cash equivalents and restricted cash at beginning of period			11,313				13,778
Cash and cash equivalents and restricted cash at end of period		$	4,392			$	4,294

ASTRONICS CORPORATION
SEGMENT DATA
(Unaudited, $ in thousands)
		Three Months Ended								Six Months Ended
		6/29/2024				7/1/2023				6/29/2024				7/1/2023
Sales
Aerospace		$	176,948			$	158,386			$	340,623			$	294,101
Less inter-segment			(5	)			(4	)			(42	)			(122	)
Total Aerospace			176,943				158,382				340,581				293,979
Test Systems1			21,171				16,072				42,607				37,013
Less inter-segment			—				—				—				—
Total Test Systems			21,171				16,072				42,607				37,013
Total consolidated sales			198,114				174,454				383,188				330,992
Segment operating profit and margins
Aerospace			19,280				13,719				31,377				17,806
			10.9	%			8.7	%			9.2	%			6.1	%
Test Systems1			(5,336	)			(6,143	)			(8,415	)			(6,740	)
			(25.2	)%			(38.2	)%			(19.8	)%			(18.2	)%
Total segment operating profit			13,944				7,576				22,962				11,066
Net gain on sale of business			—				—				—				(3,427	)
Interest expense			5,856				5,920				11,615				11,390
Corporate expenses and other2			6,829				5,558				14,617				10,130
Income (loss) before taxes		$	1,259			$	(3,902	)		$	(3,270	)		$	(7,027	)

____________________________

1 In the six months ended July 1, 2023, $5.8 million was recognized in sales related to the reversal of a deferred revenue liability recorded with a previous acquisition within our Test Systems Segment, which also benefits operating loss for the period. Absent that benefit, Test Systems operating loss was $12.6 million.

2 Corporate expenses and other for the six months ended July 1, 2023 includes income of $1.8 million associated with the reversal of a liability related to an equity investment, as we will no longer be required to make the associated payment.

ASTRONICS CORPORATION
SALES BY MARKET
(Unaudited, $ in thousands)
		Three Months Ended									Six Months Ended									2024 YTD
		6/29/2024			7/1/2023			% Change			6/29/2024			7/1/2023			% Change			% of Sales
Aerospace Segment
Commercial Transport		$	128,399		$	112,079		14.6	%		$	249,829		$	206,292		21.1	%		65.2	%
Military Aircraft			24,781			13,584		82.4	%			41,860			27,648		51.4	%		10.9	%
General Aviation			19,015			25,015		(24.0	)%			38,566			44,463		(13.3	)%		10.1	%
Other			4,748			7,704		(38.4	)%			10,326			15,576		(33.7	)%		2.7	%
Aerospace Total			176,943			158,382		11.7	%			340,581			293,979		15.9	%		88.9	%
Test Systems Segment1
Government & Defense			21,171			16,072		31.7	%			42,607			37,013		15.1	%		11.1	%
Total Sales		$	198,114		$	174,454		13.6	%		$	383,188		$	330,992		15.8	%

SALES BY PRODUCT LINE
(Unaudited, $ in thousands)
		Three Months Ended									Six Months Ended									2024 YTD
		6/29/2024			7/1/2023			% Change			6/29/2024			7/1/2023			% Change			% of Sales
Aerospace Segment
Electrical Power & Motion		$	90,328		$	67,946		32.9	%		$	173,452		$	121,400		42.9	%		45.4	%
Lighting & Safety			46,454			41,918		10.8	%			88,241			78,471		12.5	%		23.0	%
Avionics			28,971			30,923		(6.3	)%			54,565			60,664		(10.1	)%		14.2	%
Systems Certification			3,364			7,620		(55.9	)%			7,812			13,297		(41.2	)%		2.0	%
Structures			3,078			2,271		35.5	%			6,185			4,571		35.3	%		1.6	%
Other			4,748			7,704		(38.4	)%			10,326			15,576		(33.7	)%		2.7	%
Aerospace Total			176,943			158,382		11.7	%			340,581			293,979		15.9	%		88.9	%
Test Systems Segment1			21,171			16,072		31.7	%			42,607			37,013		15.1	%		11.1	%
Total Sales		$	198,114		$	174,454		13.6	%		$	383,188		$	330,992		15.8	%

____________________________

1 Test Systems sales in the six months ended July 1, 2023 included a $5.8 million reversal of a deferred revenue liability recorded with a previous acquisition.

ASTRONICS CORPORATION
ORDER AND BACKLOG TREND
(Unaudited, $ in thousands)
		Q3 2023			Q4 2023			Q1 2024			Q2 2024			Trailing Twelve Months
		9/30/2023			12/31/2023			3/30/2024			6/29/2024			6/29/2024
Sales
Aerospace		$	142,104		$	168,747		$	163,638		$	176,943		$	651,432
Test Systems			20,818			26,545			21,436			21,171			89,970
Total Sales		$	162,922		$	195,292		$	185,074		$	198,114		$	741,402
Bookings
Aerospace		$	153,272		$	172,106		$	185,269		$	192,664		$	703,311
Test Systems			22,724			11,176			19,986			26,359			80,245
Total Bookings		$	175,996		$	183,282		$	205,255		$	219,023		$	783,556
Backlog
Aerospace1		$	513,881		$	517,240		$	538,871		$	554,592
Test Systems			90,405			75,036			73,586			78,774
Total Backlog		$	604,286		$	592,276		$	612,457		$	633,366			N/A
Book:Bill Ratio
Aerospace			1.08			1.02			1.13			1.09			1.08
Test Systems			1.09			0.42			0.93			1.25			0.89
Total Book:Bill			1.08			0.94			1.11			1.11			1.06

____________________________

1 In November of 2023, a non-core contract manufacturing customer reported within the Aerospace segment declared bankruptcy, and as a result, Aerospace and Total Backlog was reduced by $19.9 million in all periods affected. In the bar chart presented above, Aerospace and Total Bookings was reduced by $2.6 million and $17.2 million in second and third quarters of 2021, respectively.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801227455/en/

Company:

David C. Burney, Chief Financial Officer

(716) 805-1599, ext. 159

david.burney@astronics.com

Investor Relations:

Deborah K. Pawlowski, Kei Advisors LLC

(716) 843-3908

dpawlowski@keiadvisors.com

Source: Astronics Corporation

FAQ

What was Astronics 's (ATRO) revenue growth in Q2 2024?

Astronics reported a 14% year-over-year revenue growth to $198.1 million in Q2 2024.

How much did Astronics' (ATRO) Aerospace segment sales increase in Q2 2024?

Astronics' Aerospace segment sales increased by 11.7% to $176.9 million in Q2 2024 compared to the same period last year.

What is Astronics 's (ATRO) updated revenue guidance for 2024?

Astronics raised its 2024 revenue guidance to a range of $780 million to $800 million.

What was Astronics' (ATRO) backlog at the end of Q2 2024?

Astronics reported a record backlog of $633.4 million at the end of Q2 2024, with a book-to-bill ratio of 1.11x.

How did Astronics' (ATRO) Adjusted EBITDA perform in Q2 2024?

Astronics' Adjusted EBITDA grew 28% to $20.2 million, representing 10.2% of sales in Q2 2024.